The Doctrine of Promis­sory Estoppels or Equitable Estoppels

The doctrine of Promis­sory Estoppels or equitable estoppels is well established in the Ad­ministrative law of the country. To put it simply the doctrine represents a principle evolved by enquiry to avoid injustice.

The basis of the doctrine is that where any party has, by his word or conduct, made to the other party an unequivocal promise of representation by word or conduct, which is intended to create legal relations or affect a legal relationship to arise in the future.

Knowing as well as intending, that the representation (assurance of the promise) would be acted upon by the other party to whom it has been made and has in fact been so acted upon by the other party.

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The promise, assurance or representation should be binding on the party making it, and that part should not be permitted to go back upon it, if it would be inequitable to allow him to do so, having regard to the dealings which have taken place, or are intended to take place, between the parties.

The doctrine of promissory estoppels against the Government also in exercise of its Government, public or executive functions, where it is necessary to prevent fraud or manifest injustice. The doctrine within the aforesaid limitations cannot be defeated on the plea of the executive necessity or freedom of future executive action.

The doctrine cannot, however, be pressed into aid to compel the Government or the public authority “to carry out a representation or promise-

(a) Which is contrary to law; or

(b) Which is outside the authority or power of the Officer of the Government or of the public authority to make?

The doctrine is an equitable one and it must yield when the equity so demands if it can be shown that, having regard to the facts and circumstances of the case, it would be inequitable to hold that the Government or the public authority to the promise, assurance or rep­resentation. The doctrine would stand displaced in such a case.

There can further be no promissory estoppels against the legisla­ture in the exercise of neither its legislative functions nor the Government or the public authority can be debarred from enforcing statutory prohibi­tion or carrying out statutory obligation by invoking this doctrine.

The Courts will only bind the Government by its promises to prevent manifest injustice or fraud and will not make the Government a slave of its policy for all times to come when the Government acts in its Governmental, public or sovereign capacity. There appears also to be consensus of judicial opinion that, for invoking the doctrine of promissory estoppels,

(a) Clear, sound and positive formations must be laid in the peti­tion by the party seeking the applicability of the doctrine and

(b) The bold expressions, without supporting material that the doctrine is attracted because the party invoking the doctrine has al­tered its position relying on the assurarce of the party, would not be sufficient to press into aid the doctrine.

The doctrine of promissory estoppels can also not be invoking in the abstract and the Court are bound to consider all aspects including the results sought to be achieved and the public good at large be­cause, while considering the applicability of the doctrine, the Courts I have to do equity and the basic principles of equity must for ever be present in the mind of the Court.

The following principles were laid down with regard to promis­sory estoppels in the case of Surendra Prasad Misra v. Oil and Na­tional Gas Commission, A.I.R. 1987 Cal. 1:—

1. Where Government or a Governmental agency makes a promise knowing or intending that it would be acted upon by the promise and if the promise, acting in accordance therewith, thereby alters his position,

(a) The Government or the Governmental agency would be held to be bound by the promise, and

(b) The promise would be enforceable against the Government or the Governmental agency at the instance of the promise, notwithstanding that:

(i) There is no consideration for the promise, or

(ii) The promise has not been reduced to writing in the form of a contract as required under Article 299 of the Constitu­tion.

2. The Government or the Governmental agency has a duty to the public in general to act fairly and reasonably so as to create a feeling amongst the general public that the latter would not be deprived of justice and fairly.

This ought to be the most accepted methodology of any administration, and contra belief or contra action on the part of the Government or the Governmental agency would lead not only to a social catastrophe but violate the basic principles of rule of law.

Fairplay and justice ought to be the basic criterion on which a governmental agency should act. The concept of justice and Rule of Law is not, however, a static one, but it ought to keep pace with the socio-economic changes in the country.

3. The doctrine of promissory estoppels ought to be applied against the government or the governmental agency where the inter­est of justice-morality and common fairness clearly indicate such a course. However, the word of caution ought not to be lost sight of that the doctrine of promissory estoppels is an equitable doctrine, and it must field when the equity so requires.

4. To say that the doctrine of promissory estoppels is restrictive in its applicability so far as the statutory obligations are concerned, cannot be termed to be a proper exposition of law considering the changing structure of the society.

Involvement of government or governmental agencies in ordinary trade and commerce is now a practical reality which cannot and ought not to be overlooked while dealing with the issue.

If a promise can form part of a cause of action connected with statutory obligation, it is too late in the day to con­tend that it ought to be restricted and no further extension ought to be allowed.